Singapore upgrades growth target

Last year's recession was the worst for 30 years

Singapore has upgraded its target for economic growth, as hopes rose of improved demand for electronics exports.

Goh Chok Tong, prime minister of the city state, said that Singapore could expect an economic growth of 1-3% in light of signs of US recovery.

The previous target was of between minus 2% and plus 2%.

"I hope the Year of the Horse will be more propitious," Mr Goh said.

"The US economy is showing signs of recovery."

However he expressed caution on prospects of a swift recovery for Singapore, as some sectors of US economy are still failing to demonstrate any rebound, Japan is far from resolving its structural problems, and the European economy remain sluggish.

Cautious optimism

PK Basu, an economist at Credit Suisse First Boston, said he saw Singapore's exports - which are based around the all-important electronics sector - rebounding in the second half of this year.

"I don't see any impediments to recovery," he said.

But Paul Schymyck, an economist with research house IDEAglobal, urged caution over the rate of revival.

"The economy is not going to gallop away this year," he said.

Singapore's economy contracted by 2.2% last year, after growing by 9.9% in 2000.

Last year's recession was the most severe for the past 30 years.